Buddha Steel Inc Common (PINK:AGVO)

PRC finally challenges VIE structure:

On March 22, 2011, Buddha Steel, Inc., a Delaware corporation; the majority shareholder of Buddha; Gold Promise (Hong Kong) Group Co., Limited, a Hong Kong Corporation (“Gold Promise”); Hebei Anbang Investment Consultation Co., Ltd., a Chinese company (“HAIC”); and Dachang Hui Autonomous County Baosheng Steel Products Co., Ltd., a Chinese company (“Baosheng Steel”) entered into a Termination Agreement pursuant to which the parties terminated the Consulting Services Agreement; Operating Agreement; Voting Rights Proxy Agreement; Option Agreement and Equity Pledge Agreement all dated as of April 2, 2010.

In March 2011, Baosheng Steel was advised by local governmental authorities in Hebei Province of the People’s Republic of China that the Control Agreements contravene current Chinese management policies related to foreign-invested enterprises and, as a result, are against public policy.

Tax Issue:

On December 31, 2010, the Chief Financial Officer of the Registrant (who is authorized to take such action) concluded that the unaudited consolidated financial statements included in the Registrant’s Quarterly Reports on Form 10-Q for the three months ended June 30, 2010 and September 30, 2010 and in the Registrant’s Current Report on Form 8-K filed on April 30, 2010, which included audited financial statements for the years ended December 31, 2009 and 2008 (the “Original Filings”), should no longer be relied upon due to an understatement of provisions for income taxes in such periods. This understatement resulted in an overstatement of net income, comprehensive income and income per share of common stock, and an understatement of tax liability during each period presented.

On April 28, 2010 Buddah Steel became a public company via a reverse merger transaction.

Company Snapshot:

Leading producer and vendor of high value-added, ultra-thin precision cold rolled steel products.

Industry Snapshot:

• Demand for our products is driven in line with macroeconomic industrial growth both globally and in the PRC. As our end products range from automobiles to appliances, general economic growth underlies our success, especially in China.
  
• China is the largest steel producing country in the world.
  
• Our products, custom ultra thin cold-rolled steel sheets and coils, are a vital component in a variety of industrial products, including but not limited to roofing, appliances, telecommunications equipment, motor vehicles and motor vehicle parts and accessories.
  
• We are the largest manufacturer in Hebei of high precision cold-rolled narrow strip steel. Hebei is the largest steel producing province in China.

Post Merger Share Calculation:

•    125,000: Pre reverse merger outstanding shares  (post 1 for 186 reverser split)
• 9,875,000: Newly issued shares of Common Stock (Via a convertible preferred)

GeoTeam® best effort calculation of total post reverse merger shares assuming full conversions:  10,000,000

Financial Snapshot:

From 2007 through 2009, our revenues have grown at an annualized rate of 28% and we have increased sales of more profitable product lines so that our profit nearly doubled from 2008 to 2009.